Upcoming changes to the National Minimum Wage

In addition, this year’s report includes the LPC’s intention to review the policy framework around the accommodation off-set and their future approach to making recommendations on the off-set rates. The report confirms the increase of the NLW rate to £10.42 from April 2023 (a 9.7% increase currently payable to those aged 23 and over) and a higher increase (10.9% to £10.18) for 21–22-year-olds in preparation for extending the NLW wage to this age range by 2024.

The full report can be accessed here https://lnkd.in/eYd7xt3n but listed below are some interesting snippets regarding the LPC’s proposed recommendations and considerations: -

Apprentices remain the group most likely to be underpaid. Around a quarter of apprentices are paid below (within 5p) the minimum wage rate mainly due to training time not being treated as working time.
An Apprentice Evaluation Survey is to be undertaken in 2024 to evaluate the need for a separate apprentice rate.
To consider a minimum hour’s requirement in relation to applying the accommodation off-set before deducting charges from low-paid workers and restrain the increase in the off-set amount until a level of standard of accommodation is in place.
Seafarers to be exempt from the accommodation off-set being applied as they are confined to their work premises and required to be available in case of an emergency.
Strengthening legislation to limit the use of zero-hours contracts, prevent the bogus classification of workers as ‘self-employed’ and to extend employment rights.
45% of NMW workers are in retail, hospitality, or cleaning, with a significant amount of minimum wage workers in childcare or social care sectors
Measured underpayments have increased by around 100,000 workers in 2022 since 2019
Employers are reporting pressures on maintaining pay differentials impacting on staff engagement and retention.
A focus on geographical areas of low paying sectors – social care and zero hours in Scotland, hospitality and food production in Wales and traditionally deprived areas such as the North East, North West, East Midlands, and West Midlands.

The report gives some good ammunition for HMRC to consider in their enforcement approach of NMW for 2023-24. Our firm has in-house National Minimum Wage expertise with a HMRC background providing insight into their enforcement approach and investigative strategy. If you’d like a chat about how compliant you think your NMW processes are, or how to expand your employee rewards, then please do get in contact.

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